Monthly Archives: September 2015

Oversold ? ASX:BDR, ASX: TGS

15 Sept 2015
I know its been a while but the market has been in a very volatile state
the volatility index (S&P ASX 200 VIX) is around the 20 plus mark which correlates to other large correction/recessionary periods
to get the picture it usually sits in the 9-15 range which is saying a lot

anyways as a result of this there are some interesting companies which may have taken an undue hammering in the market. I would consider them over-hammered

1. ASX:BDR
Beadell Resources Ltd

Corporate Snapshot

Market Cap 84 M
Share Price: $0.105
Cash @ June 2015 $ 11 M

What do they do:
– Gold Producer

Story so far
Had a particularly bad 2015 – Dive in profit and revenue

Reasons to get on Board
– 2016 is going better so far
– Costs are in Brazilian Real currency which has depreciated against USD as has the AUD
– this means Cash cost around 1,000 USD as long as Gold Price stays at $1100 then
potentially Profit could be in vicinity of $13 – 30M
– new mine plan and equipment should help to ensure better operational outcomes

Reasons to NOT get on board
– Rain and production issues seem to have dogged beadell
– gold price drops below $1,000

My thoughts
In this current environment gold will become a safe haven and this should positively impact gold producers

Verdict – Buy below 11c

As always This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post

2.
ASX:TGS
Tiger Resources Ltd

Corporate Snapshot

Market Cap 67 M
Share Price: $0.059
Cash @ June 2015 $ 31 M

What do they do:
– Copper Producer

Story so far
Had a particularly bad 2015 – Dive in profit
loss attributable to the 60% tax depreciation in the first year
Higher revenues
increase reserves from the buyout of the whole operation going from around 60% to 95%
was a lot of problems with the financing of that

Reasons to get on Board
– 2016 is going well and the development of the assets to increase production has started
– low cost operation (under $1.3-1.7/lb)
– 16 year life of Mine
– Funding seems to have been settled

Reasons to NOT get on board
– Country Risk – in Democratic Republic of Congo
– production doesn’t reach planned levels
– Copper price drops below $2/lb

My thoughts
low cost producer and still profitable at the current copper price

Verdict – Buy below 6c

As always This column is the personal opinion of the writer and does not imply any stock recommendations or offer financial advice. Readers should do further research of their own or talk to their adviser before acting on themes in this article. All prices and analysis at the Date of publication at the top of the post